COMMITTEE:

MUNICIPAL YEAR 2010/11 REPORT NO. 30

MEETING TITLE AND DATE:

Cabinet 14^th July 2010

REPORT OF:

Director of Finance and

Corporate Resources

Contact: Hitesh Jolapara

DDI: 020-8379 4732 or ext. 4732

1. EXECUTIVE SUMMARY

The Government announced £6b of in-year savings on the 23^rd of May 2010 as part of its policy to increase the rate of reduction in the deficit in public finances. Local government's share of this amounts to £1.16b of which Enfield's share was confirmed on 10 June as £6.885m.

In the context of financial planning, in order to deliver savings whilst minimising the impact on services and to ensure that there will be no compulsory staff redundancies, the savings measures need to be agreed urgently.

RECOMMENDATIONS

It is recommended that Cabinet:

Agree the package of savings set out in the report for implementation within the current financial year.

3. BACKGROUND

The Council has a statutory duty to set and maintain a balanced budget. Any delay in implementing the proposals to balance the budget would have a potentially greater impact later in the financial year. Urgent action is required to implement the savings proposals as soon as possible to maintain a balanced budget.

The Coalition Government came to power in May with a policy of accelerating the response to the deficit in the public finances. Within three weeks of the General Election, in-year savings of £6.2bn were announced, local government's share of which is £1.16b and a result Enfield will receive £6.885m less grant than expected. In order to respond to the announcement, officers have advised that it is necessary for the Council to make plans at pace for in-year savings.

The Chancellor's Emergency Budget on 22nd June announced cuts in Government departmental spending (excluding the National Health Service and Overseas Development) averaging 25% over the four years to the end of 2014/15. At this stage details about how this will impact local government will not be known until after the Spending Review, which is expected to report in the Autumn. The impact on local government will depend on the priority the new Government places on local government services and a judgement about local authority's capacity for finding new savings at the levels to be set.

Enfield, in line with best practice, adopts a Medium Term approach to financial planning. The focus of the Medium Term Financial Plan (MTFP) will be to deliver fairness, growth and sustainability throughout the borough. The MTFP for the period from 2011/12 to 2015/16 indicates a General Fund savings requirement of £57m. This is summarised in table 1 below. The in year reductions of £6.885m need to be placed in this context and the reductions below are expected to be on top of those to be implemented in year.

Table 1 - 2011-16 Current Forecast Budget Gap

Latest Position	Budget 2011/12	Budget 2012/13	Budget 2013/14	Budget 2014/15	Budget 2015/16
Latest Position		£000's	£000's	£000's	£000's	£000's
Budget Gap	20,385	32,996	44,049	53,402	56,047
Cumulative Year on Year Gap		12,611	11,053	9,353	2,645

4 In Year Budget Savings Proposal

4.1 Table 2 below summarises the in year saving proposals by service area and details are shown in Appendix 1. In developing these proposals officers have been mindful of the Administration's desire to minimise the impact on services and avoiding compulsory redundancies.

Table 2- 2010/11 In Year Budget Savings Proposals

	£m
Amount to be saved:	6.885

Education, Children Services and Leisure total grants	2.181
Environment and Street Scene total grants	0.187
Place Shaping and Enterprise total grants	0.650
Health and Adult Social Care total grants	0.267
Local Area Agreement (Chief Executive)	3.600

Total departmental savings	6.885

5. ALTERNATIVE OPTIONS CONSIDERED

5.1 The alternative option would be to take no action at this stage. The risk to the authority of not taking action to retain a balanced budget is that more drastic action may be necessary at a later stage to maintain the financial integrity of the authority, which would be more likely to impact services.

6. REASONS FOR RECOMMENDATIONS

6.1 To agree the 2010/11 budget reductions in order to meet Enfield's allocation of the £1.16b savings in local government spending.

7. COMMENTS OF THE DIRECTOR OF FINANCE AND CORPORATE RESOURCES AND OTHER DEPARTMENTS

FINANCIAL IMPLICATIONS

7.1 By planning an effective budget, and considering financial resources in the light of the Council's strategic priorities and other resources the framework for the development of the budget is robust, and in line with service delivery requirements. By considering risk as part of this process, council reserves and balances will be appropriately set to ensure the continued financial stability of the Authority.

LEGAL IMPLICATIONS

The Council is required by section 151 of the Local Government Act 1972 to make arrangements for the proper administration of its financial affairs. These include procedures for budgetary control. It is consistent with these arrangements for Members to receive information about the revenue budget as set out in the report and to take decisions necessary to keep the Council within budget. The proposals set out in Appendix A are capable of being carried out in accordance with the Council's statutory functions.

PROPERTY IMPLICATIONS

7.3 None directly arising from this paper.

COMMUNITY IMPLICATIONS

7.4 Enfield Council undertakes extensive consultation with many stakeholders during the budget planning process and the Administration has been fully consulted on the proposals in this report.

8. PUTTING ENFIELD FIRST

The report contributes to providing high quality efficient services to the Council.

KEY RISKS

In setting and monitoring the budget the Council will consider all major budget risks as part of this process. Council reserves and balances will be appropriately set to ensure the continued financial stability of the Authority.

Education, Children's Services and Leisure (ECSL)
Budget Reduction	Description
£m
0.095	Net underspend on ECSL May 2010 monitoring report (General Fund)
0.194	09/10 unapplied centrally-held standards fund grant in relation to ethnic minority achievement:
0.012	09/10 unapplied centrally-held standards fund grant in relation to broadband connectivity in schools:
0.108	09/10 unapplied centrally-held standards fund grant in relation to 'Making good progress' providing 1-2-1 tuition in schools.
0.225	09/10 unapplied devolved standards fund to be substituted for 10/11 Area Based Grant (ABG) devolved to schools for extended services:
0.098	Transfer of salary costs for 14-19 reform programme charged to external grant rather than ABG.
0.085	Uncommitted budget in the Connections programme.
0.037	Cutting funding for training activity in relation to healthy school agenda (ABG: Education Health Partnership)
0.031	ABG funding not currently committed for 10/11
0.416	Uncommitted Think Family project funding
0.085	Grant funding for free swimming (April -July 2010) can be released with costs of free swimming met by the new leisure centres contract. If required by the Administration.
0.254	Uncommitted reserve held to continue service provsion (adult education, sport in schools and training) after planned cessation of external grant funding in 2011
0.065	Uncommitted budget in Positive Activities for Young People Programme.
0.047	24% reduction in Youth Opportunity Fund:
0.020	Flexibility within grant funding for transferred staff from LSC.

0.119	Net underspend on ECSL budget following planned re-routing of Special Educational Needs transport routes in summer 2010 eliminating forecast overspend on this General Fund budget.
0.150	Capture of savings in ECSL budget following decisions already taken corporately in relation to deferral of external/agency recruitment, reduced cost of current agency staff, limited use of external conference venues, reduced attendance at conferences etc.
0.140	3% top slice from most remaining non-devolved ABG grants except where contractually committed.
2.181

Environment and Street Scene (ESS)
Budget Reduction	Description
£m


0.093	ABG - Prevent The funding is contributing to/supporting the delivery of 22 projects. Projects will be reviewed to reduce individual allocations where possible.
0.033	ABG - Home Office The funding is contributing to/supporting the delivery of 26 projects. Projects will be reviewed to reduce individual allocations where possible.
0.061	Housing and Planning Delivery Grant - Reduction in income target which has been set against this grant
0.187

Place Shaping and Enterprise (PSE)
Budget Reduction	Description
£m

0.427	LABGI - funding no longer being awarded to the Council.
0.162	Working Neighbourhoods Fund: programme will be reduced accordingly.
0.061	Housing and Planning Delivery Grant (50%). Funding no longer being awarded to the Council.
0.650

Health and Adult Social Care (HASC)
Budget Reduction	Description
£m

0.267	There will be a reduction in the Support People Team staffing costs to £200k pa, to be implemented as part of the merging of Supporting People with Social Care Contacts and Procurement functions. This will be completed by October 2010. We do not anticipate any redundancy costs as a result of this at this stage, as post holders will be re-designated to other vacancies. In addition we will renegotiate existing Supporting People (housing related support) contracts to reduce scale and/or prices to achieve required full year savings, on an ongoing basis. In particular we will reduce contract values to take account of under occupancy of services and beyond 2010 will continue to hold the position of no inflation up lifts.Based on savings delivered within the Supporting People Programme in the last 2 years of 370k, we are confident that by the end of 2010/2011 we will have achieved the additional £200k required. In year we have already reduced use of interims and kept a number of vacancies unfilled to ensure savings are delivered for 2010/11. This will create an in year saving of £70k.
0.267


Local Area Agreement ( Chief Executive)
Budget Reduction	Description
£m
2.700	Unallocated Performance Reward
0.040	Childhood Obesity Project - reduced
0.036	Senior Child Health Manager - reduced
0.030	Pathways to a new career - reduced
0.020	Health Trainers - reduced
0.025	Training for Employment - reduced
0.007	Enfield Jobsnet - reduced
0.040	Delivering Roads Policing - CANCELLED
0.075	Thematic Action Group Energy Audits - CANCELLED
0.031	Sustainable Travel to School Strategy - reduced/ending early
0.064	Hospital Alcohol Liaison Service - CANCELLED
0.156	Community Development Workers (Health) - CANCELLED
0.045	Overcrowding Reduction - reduced
0.007	Leisure & Culture Research - reduced
0.011	School Based Community Sport - reduced
0.007	Simply Come Dancing - reduced
0.121	Automated Number Plate System - CANCELLED
0.040	Anti Social Behaviour Outreach - CANCELLED
0.025	Enfield Strategic Partnership Core Support - reduced
0.070	Young Peoples Café - ended early
0.050	Young Offenders Service - reduced
3.600

Cabinet Report July 2010

APPENDIX 1

AGENDA PART 1 ITEM 8

_____________________________________

2010/11 In Year Budget Reductions

Cabinet Member consulted:

Councillor Andrew Stafford